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Construction Law/Dispute abot consideration of penalties and contract amount


Sir, we have recently completed a Project in Bahrain. There were some items in BOQ  such as AC machines, Tiles   which were client procured items. During the course of work, client instructed us to procure these items on his behalf. We procured and charge a minimum profit and O/H.  Due to delay in procurement of AC, we delayed the project by 25 days. Now client want to put penalty due to delays and also some work man ship problems. We agreed to pay some percentage of contract amount to client in lieu of it.  But Client want to consider the contract amount including the cost of client procured items and not the original BOQ contract amount. Please let us know, the contract amount includes client procured items also. in our BOQ, there was no any PC sum, only mention that the items will be arranged by Client. Is client right  to revise the contract amount?

Dear Ali Ahmed,
Thanks for the question.
As is clear from the stated position,the employer gave additional work to your firm which is a variation and you could have asked for additional time while executing or agreeing for the issuance  of a variation order(VO).In case you have not made any request at that time ,I am afraid it to be executed without extra time. With your signing the VO,the contract amount automatically changes to the new figure of contract amount .Any way,such ommision cost dearly.
Regards-liaqat hayat

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Liaqat Hayat


I can answer questions based on FIDIC 4 and FIDIC 1999 [design-build] with particular reference to time extension , price adjustment and disputes. I am in particular more inclined for response to points pertaining to how claims should be framed and put up in case of technical or other contractual shortcomings. Regarding procurement matters I have spent over 5 years as procurement specialist for highway authority and dealt with numerous claims and disputes in the capacity of "The Engineer" .

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